Nufarm Ltd (ASX:NUF) clearly gave little comfort with today’s announcement that the company had secured waivers on its banking covenants.
The company’s share price today has dropped as low as $3.75 and is currently trading over 6% down on yesterday’s close. Still, its a good way off its 52 week low of $3.20.
Perhaps frustrated investors were unnerved by the statement that the “funding facility is subject to performance against interim milestones , as well as progress relating to strategy and management plans, as discussed with lenders.” The language isn’t exactly exuding banker confidence.
But more likely they were unimpressed that Nufarm will not pay a full-year ordinary dividend for the 2010 fiscal. Given that Nufarm was a yield play for many, that's got to hurt.
Earlier this month, disgruntled Nufarm shareholders were considering a a class action against the agricultural chemicals supplier for allegedly misleading conduct relating to profit forecasts. Nufarm shares plunged nearly 30% in July after a profit downgrade and adding insult to Moody's ratings downgrade.
Nufarm’s audited full year results are out tomorrow.